![]() Always tentative - the idea of planning needs to take into account sustainability, conflicts & competition viz resources & their control, and the manners viz them. Within the ambit of scarcity-resources-demand & the manipulations of those to end up in myopic court songs in a tyrant's court - economics needs to rethink what it means by growth as well as development including the fact of economics as a service sector secondary subject that helps plan viz the primary ones including the rationale of any state & its objectives viz strategic tenures (3050 CE being useful here). There are reasons not only for China but all the economies of the world to consider their meaning(s) of economics as a topic, since it is no longer a subject with its current framework. Meanwhile, costly COVID-19 testing and quarantines have strained China’s fiscal capacity. While credit expansion would boost aggregate demand, it could have the undesirable effect of driving up inflation. Making future policies more predictable would be very useful to enhance confidence, but policy predictability cannot be achieved by a simple government proclamation. To break the cycle of pessimism, Chinese policymakers must restore confidence in the short term. But lower revenues would eventually hurt these firms’ own upstream suppliers. ![]() If enough businesses and households lose confidence and cut their spending, there will be lower demand for products and services by other firms. In a recent survey of domestic and foreign firms operating in China, the Shanghai-based China Europe International Business School found that Chinese business confidence has sunk to a new low. ![]() Likewise, many firms are wary of investing, after recent revenue disruptions and tighter regulatory scrutiny in education, tech, and other sectors. Following a sustained period of repeated lockdowns, many small entrepreneurs and workers in traditional service sectors who have feared for their jobs and incomes are reluctant to make purchases. Restoring confidence may be more important than expanding credit in the short run. But growth recovery is not automatic, and China must contend with several challenges, including declining confidence among firms and households about their future incomes in the short run, insufficient productivity growth in the medium run, and an unfavorable demographic transition in the long run. The Economist Intelligence Unit, for example, has revised its forecast for Chinese GDP growth in 2023 upward, to 5.2%. NEW YORK – China’s recent decision to abandon its strict zero-COVID policy has led many to believe that its economy will bounce back. ![]()
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